You and your spouse may be jointly liable on joint debts, even after the divorce. The court cannot change an agreement with a creditor. Therefore, if you have a joint credit card with your spouse, the credit card company is free to pursue either you or your spouse for the balance due, even after your divorce is complete.
You can agree with your spouse how you would like to allocate the marital debts, and the court can order one spouse to be primarily responsible for a debt. However, you should cancel all joint accounts with your spouse, and you should do so in writing to the creditor. Merely cutting up credit cards is not enough. For debts that are held jointly but are too large to pay off, such as a mortgage, you should attempt to enter into a novation, or substitution of a new contract for an old one, with the creditor. This involves the creditor essentially reissuing the loan in the name of only one spouse. This will relieve the other spouse for liability on the debt.
The parties’ indebtedness at the time of separation and the indebtedness incurred up to the date of the divorce are subject to great misunderstanding. It is preferable for the parties to agree which obligations each will pay during this period. Failure to make such an agreement may cause confusion and pressure from creditors may require the court’s intervention to allocate responsibility for the debts. However, it is crucial that you notify your lawyer before agreeing to be responsible for any debts. It is necessary for your lawyer to have an up-to-date and complete list of all indebtedness.
Kevin P. Rauseo is a former director at Hamblett & Kerrigan P.A. and has since been appointed as a Justice for the New Hampshire Circuit Court. Please feel free to contact another attorney at Hamblett & Kerrigan to discuss your legal issues.